Coffee futures up 8%, head for a more than one-year high

Coffee futures were poised to extend their rally to a seventh consecutive session on Wednesday — and mark their highest settlement in more than a year — with concerns over the dry weather in Brazil continuing to fuel worries about global supplies.

May coffee
jumped 12 cents, or 7.9%, to $1.67 a pound on the ICE Futures U.S. exchange. Tracking the most-active contracts, futures prices haven\’t settled at a level this high since October 2012, according to FactSet data.

Year to date, coffee futures have already jumped by nearly 51%. So far this week, they’ve gained 17% and they’re up 33% month-to-date.

“Investors are looking for dry weather conditions in Brazil to have a negative impact on supply of coffee, thus causing strong buying today and this week overall so far,” said Jason Rotman, president of Lido Isle Advisors. “Coffee seems to be extraordinarily strong due to these weather concerns, and we look for the $1.75 level to be a key resistance area and next target higher.”

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